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PMP Formulas

Earned Value

CV = EV - AC

CPI = EV / AC

SV = EV - PV

SPI = EV / PV

EAC ‘no variances’ = BAC / CPI

EAC ‘fundamentally flawed’ = AC + ETC

EAC ‘atypical’ = AC + BAC - EV

EAC ‘typical’ = AC + ((BAC - EV) / CPI)

ETC = EAC - AC

ETC ‘atypical’ = BAC - EV

ETC ‘typical’ = (BAC - EV) / CPI

ETC ‘flawed’ = new estimate

Percent Complete = EV / BAC * 100

VAC = BAC - EAC

EV = % complete * BAC

% COMPLETE = EV / BAC x 100

% SPENT = AC / BAC x 100

CV% = CV / EV x 100

SV% = SV / PV x 100

PERT

PERT 3-point = (Pessimistic+(4*Most Likely)+Optimistic)/6

PERT α = (Pessimistic - Optimistic) / 6

PERT Activity Variance = ((Pessimistic - Optimistic) / 6)^2

PERT Variance all activities = _sum((Pessimistic - Optimistic) / 6)^2

Classes of Estimates

Order of Magnitude estimate = -25% to +75%

Preliminary estimate = -15% to + 50%

Budget estimate = -10% to +25%

Definitive estimate = -5% to +10%

Final estimate = 0%

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Project Selection

PV = FV / (1+r)^n

FV = PV * (1+r)^n

NPV = Select biggest number.

ROI = Select biggest number.

IRR = Select biggest number.

Payback Period = Add up the projected cash inflow minus expenses until you reach the initial investment.

BCR = Benefit / Cost

CBR = Cost / Benefit

Opportunity Cost = The value of the project not chosen.

Exp. Value = Probability % x Consequence $

Communications

Communication Channels = n * (n-1) / 2

Probability

EMV = Probability * Impact in currency

Procurement

PTA = ((Ceiling Price - Target Price) / Buyer's Share Ratio) + Target Cost

Depreciation

Straight-line Depreciation: Depr. Expense = Asset Cost / Useful Life Depr. Rate = 100% / Useful Life

Double Declining Balance Method: Depr. Rate = 2 * (100% / Useful Life) Depr. Expense = Depreciation Rate * Book Value at Beginning of Year Book Value = Book Value at beginning of year - Depreciation Expense

Sum-of-Years' Digits Method: Sum of digits = Useful Life + (Useful Life - 1) + (Useful Life - 2) + etc. Depr. rate = fraction of years left and sum of the digits (i.e. 4/15th)

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SIGMA

1 sigma = 68.26%

2 sigma = 95.46%

3 sigma = 99.73%

6 sigma = 99.99%

Important Values

Control Limits = 3 sigma from mean

Control Specifications = Defined by customer; less than the control limits

Float on the critical path = 0 days

Pareto Diagram = 80/20

Time a PM spends communicating = 90%

Crashing a project = Crash least expensive tasks on critical path.

JIT inventory = 0% (or very close to 0%.)

Network Diagram

Forward Pass

ES = EF of the predecessor node

EF = ES + Dur

Backward Pass

LF = LS of the Successor

LS = LF – Dur

Slack = LF – EF = LS – ES Free Float = ES(Successor) - EF(Predecessor)

You need to understand the formulas not only memorize them

Refer to the PMBoK 4th Edition for more details

PMI®, PMP®, CAPM® and PMBOK® Guide are trademarks of the Project Management Institute, Inc. PMI® has not endorsed and did not participate in the development of this product.

ES Dur EF

Node

LS Float LF

ES Du EF

Prepared by: Amr Miqdadi,PMP,MCSE amiqdadi@pmlead.net